Fonterra partnership given the go-ahead

Arla Foods’ partnership with the New Zealand dairy group, Fonterra, covering the sale, distribution and marketing of the two largest butter brands, Lurpak and Anchor, in the UK was approved on Wednesday by the UK’s Office of Fair Trading. Consequently, the new Danish-based joint venture can now begin. Arla Foods will own 75% of the company, while Fonterra will own 25%.

As Anchor is almost exclusively sold in the UK market, Arla Foods’ UK subsidiary will be responsible for marketing the two products. The agreement, however, also covers Arla Foods’ British produced butter brand, Yorkshire Butter, as well as several Fonterra products, e.g. sales of cheese in the UK. Besides sales in the UK market, the new agreement also includes the sale and marketing of various Fonterra products in the European market. In total, the new agreement covers sales of 90,000 tonnes of product. The agreement is expected to become effective at the start of the new year.